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mikenmild

‘Ever since the Paul Keating days, I’ve never entirely trusted Australian Governments.’
You are well on form today DPF. IN the good old days of Malcolm Fraser and Bob Hawke, Australian politicans were so much more trustworthy!

anonymouse

Hmm, yes the Australians are dragging the chain on this ( I suspect the Australian Fund Management industry are making sure this takes as long as possible) ,but there are a couple of contradictory remarks in the quotes from Mr Buckingham

“He said his funds are being eaten up by fees” “I’ve got a lot of super sitting in Australia” he said.

I guess it all depends on what the definition of “a lot of super” is

The returns on that money should still mean the overall balance is increasing, fees don’t tend to lower the value of an investment unless it is small <10K etc?, or the scheme provider is really creaming it.

Grendel

i think this Buckingham guy will be disappointed in his desire to “to see the money put toward supporting his young family.”

everything i have read about this for when it eventually happens will be that you are required to transfer the funds to a similar locked scheme in NZ, ie KiwiSaver.

just like the QROPS scheme in the UK (though thats going through turmoil due to UK govt changes recently).

I have a large list of clients looking forward to this so we can bring their money back to their KiwiSavers, which for some of them will significantly boost their house deposit withdrawal funds (assuming the rules around first home withdrawal do not change).

BTW what is with this increasing emotional crap we get now when someone is pushing for something. the fact that he has a family (young or old) is irrelevant, the only thing that is relevant is that its the right thing to do for someone who has permanently emigrated from a country. should i care more becuase he thinks he will get the cash for his ‘young’ family. is his situation more important than the single person with money locked in OZ?

Grendel

the ozzie govt is not confiscating the funds. they are just currently not letting you transfer them out before retirement age when you emigrate (at least to NZ, not sure about other countries).

as it stands, when you are eligible for the funds in OZ, you can still withdraw them as normal and do with them what you will. however becuase you cannot contribute (i beleive) when you are not in OZ, people want the option of transferring to a NZ fund they are contributing to regularly. NZ has passed this, but for some reason OZ is dragging the chain.

NZ Kiwisaver funds are in private companys hands, held in trust for their members. its a brave govt that decides to pass legislation allowing it to reach into a private account and take money from it.

gazzmaniac

The returns on that money should still mean the overall balance is increasing, fees don’t tend to lower the value of an investment unless it is small <10K etc?, or the scheme provider is really creaming it.

You obviously have no experience with the Aussie Super industry. I’ve had money in compulsory super since I moved here in 2007. When I saw the first prospectus for a retail fund that shall remain nameless, I looked at their “aggressive” super fund, I saw the 10% return they made in the 2006 tax year and thought “beauty!”. As a recent immigrant I didn’t realise that the ASX200 fund had netted 15% – so their financial “professionals” playing with the share distributions actually cost investors 1/3 of the return of the index fund. Being that I wasn’t entirely stupid, I put some money into a balanced fund and a cash fund also.
Since I joined the scheme, they lost money every year except for 2010, when they made me about $200. They charge $1 per week in admin and each “fund” charges a percentage of your total regardless of whether they make money. That $200 has been well eaten. The only reason why my balance grew is because I was required to make contributions.

Fast forward to this year, I set up a SMSF and transferred my balance to it in February. I’ve got the money on term deposit in the bank. It’s returning just over 5%, and my only expense is the yearly audit which will cost about $400 (in other words, less than the retail super fund lost last year). I’m ahead. Your average balanced portfolio retail fund made 0.5% (before fees of course) this year which is disgusting – I made more than that with money in the bank in less than six months. Including the audit cost. Even then the money would be better spent paying down my mortgage, since the interest of the mortgage is higher than term deposit (obviously) and the return is not taxed (even the modest 15% tax on super fund profits still makes a painful bite).

And for those who want to know, it is my understanding that the Australian government will require New Zealanders to either stay with the Australian fund or to transfer to a Kiwisaver fund and will require that money to be tied up until retirement. Australians obviously have to keep theirs in Australia if they emigrate. Only if you’re a citizen of any other country and you tell them that you are moving from Australia and New Zealand permanently can you get a cheque.

fruitshop

Say an expat Kiwi worked 35 years in Australia paying into their compulsory pension fund and contributing to their economy.

Then they return to NZ to retire.
Under the reciprocal agreement, they are eligible for full NZ Super – but their Aust pension is deducted from NZ Super.

If returning ex pat Kiwi cashed it in before retirement age, NZ taxpayer would fund the full NZ Super.
It’s more complex than it first appears because NZ Super is 100% universal and other countries have a compulsory contributory system.

Cunningham

It’s fucking disgraceful behaviour by the Australian government. Allowing kiwis to bring back THEIR funds would be a big boost for NZ as it will encourage alot of people to come back while also bringing in alot of extra money. Can’t say I am surprised. Australian governments don’t really give a shit about this country when push comes to shove despite their rhetoric.

gazzmaniac

capitald

Anonymouse (10:19am):

The way that Australian Super works is a little different to Kiwisaver. In New Zealand, your Kiwisaver contributions are collected by the Inland Revenue Department by way of the payroll returns by your employer. In Australia, your contributions are paid by your employer directly into the super fund. Each time you change jobs, you either provide the account details of your preferred super fund, or you are automatically enrolled in that employers default scheme. Most people who have worked in Australia have a very large number of super funds – and most need to “consolidate” their super.

This is the situation that I am in – I have a few – some have high balances, which are moving forward, others have very little in them, which is why they are going backwards. About eighteen months ago I looked into consolidating these funds. In order to do this I need to get the sign-off from a licensed Australian Super advisor, or a list of other people who would be required to sign the transfer forms….. all of these people are Australian, unless I approach someone from the Embassy, at a decent cost to sign them….. I’m more than happy to get this together, the only reason that I held off was because local Kiwisaver providers were telling me that the trans-tasman super transfer program should be sorted relatively quickly.

Most of the interview I actually spent time focusing on the treaty between New Zealand and Australia, what I had done to approach the Australian politicians and how I believe that there are hundreds of millions of dollars in super funds that would be better coming into the New Zealand economy to create jobs.

I would much have preferred to have these comments focused on. What you need to understand is the medium, television is about pictures. Finance stories have very few pictures. Television stories also need to be built around a “real person” – which in order to push this issue in front of 750,000 people, I was happy to do. This is the trade-off that you make when you are trying to put an issue into the media. If I were to be sitting in the editing suite, I would be using the other comments I made – this is a news item, not video produced by a PR department.

Grendel (10:22am):

At no time did I say to TVNZ that I saw the money going to my young family. The money goes directly into Kiwisaver should it be transferred here. I communicated this very clearly to the journalist. Not a lack of understanding on my part sorry.

Your money is your money, you are correct, it doesn’t matter if you are married or single.

Beven (11:11am):

See my explanation above.

Cunningham: (2:05pm):

There is every possibility that Australian Funds Managers have put some pressure on the Australian Government, that is why I have put the effort into convincing TVNZ to run a story on the matter, and why I encouraged David Farrar to blog about it.

gazzmaniac

capitald – Your super fund managers are having you on. You can use this form to transfer it, with no requirement to get somebody else to sign it. The only catch is that some providers will charge you $40 to do this but under the Superannuation Act they can’t stop you from doing that. They’ll probably charge you the same or more to transfer to a Kiwisaver account when the legislation passes.

There is a really good section about super on the ATO website if you need further information.